Note: This text was revised from an earlier version in an effort to more clearly explain background information about William Ayers and the Weather Underground.

Guilt by association is the latest theme of the presidential race. John McCain's campaign continues to attack Barack Obama for his relationship with Vietnam-era radical Bill Ayers. The Obama campaign fired back Monday with a 13-minute Web video on John McCain's connection to Charles Keating and the 1980s savings and loan crisis.

"Our opponent is someone who sees America as imperfect enough to pal around with terrorists who targeted their own country," Republican vice presidential nominee Sarah Palin said about Obama on the stump this past weekend.

She was talking about Ayers, a founding member of the radical anti-Vietnam War group known as the Weathermen, and later as the Weather Underground. The group's goal was to disrupt the war effort by bombing government buildings, such as the Pentagon and the U.S. Capitol.

The FBI labeled the now-defunct Weather Underground a "domestic terrorist group." Authorities suspected the group of planting a bomb at a San Francisco police station in 1970; the blast killed one police officer and seriously injured another, but no charges were ever filed in the case. In most of the bombings the group claimed responsibility for, the explosions only damaged buildings; no one was killed or injured in those.

After Ayers left the group, members of the Weather Underground were linked to a 1981 Brink's armored truck robbery in which two police officers and a security guard were killed.

The federal government did file charges against Ayers and other members of the group related to their bombing activities.

In the '70s, Ayers went into hiding with his wife, Weathermen co-founder Bernardine Dohrn, and they left the radical group. They resurfaced in Chicago around 1980, after federal charges against them were dropped.

Ayers became a professor of education at the University of Illinois at Chicago and became involved in the growing effort to reform Chicago's beleaguered public schools. It was in that capacity that he and Obama first met in early 1995. The two also live close to one another in Chicago's Hyde Park neighborhood.

Here's how Obama first described the nature of his relationship with Ayers, when asked about it in a Democratic presidential debate against Sen. Hillary Clinton in April: "This is a guy who lives in my neighborhood, who is a professor of English in Chicago, who I know, and who I have not received some official endorsement from. He is not someone I exchange ideas (with) on a regular basis."

Obama went on to say Ayers "engaged in despicable acts 40 years ago when I was 8 years old," and to suggest that "that reflects on me and my values doesn't make much sense."

How Well Do They Know Each Other?

But Palin suggests Obama is downplaying how well he knows Ayers.

"Barack Obama said Ayers was just someone in the neighborhood. But that's less than truthful. His own top adviser said they were 'certainly friendly.' In fact, Obama held one of the first meetings of his political career in Bill Ayers' home. And they've worked together on various projects in Chicago," Palin said Sunday.

Did Obama "pal around with," Ayers? And, more importantly, is Ayers still considered a terrorist?

On the first question, there is some evidence to suggest Obama knows Ayers a little better than he acknowledges. They certainly ran in the same liberal Chicago circles in the 1990s and early 2000s. They lived within blocks of each other, and Obama's two daughters now go to the same school Ayers' children attended, though they are now grown.

The Obama campaign says he first met Ayers in 1995, when Obama became chair of the board of the Chicago Annenberg Challenge, a $50 million fund that awarded grants to groups trying to implement new programs to improve inner city education in Chicago.

Walter Annenberg, a lifelong Republican and former ambassador who was appointed by Presidents Nixon and Reagan, funded an ambitious program to reform urban education in many cities in the mid 1990s. Ayers was an important member of the group that developed and wrote the grant proposal to the Annenberg Foundation.

Obama and Ayers attended at least six meetings together over six years, Annenberg Challenge records show, and those knowledgeable of the school reform group say it is likely there were other informal sessions of the group that they both attended. But no one on the board or on the Annenberg Challenge staff remembers Obama being any closer to Ayers than to any other member of the board. The Annenberg board also included several civic, business and education leaders, many of them Republicans.

Obama and Ayers also served together on the board of another charity, the Woods Fund of Chicago, an organization that also had conservative members. The two have not served on either board together since 2002.

Later in 1995, Ayers hosted a "getting to know you" gathering at his house as Obama was preparing for his first campaign, a run for the Illinois Senate. The incumbent state senator, Alice Palmer, had announced she would run for Congress.

To help Obama in the Democratic primary race to succeed her, Palmer organized a few informal meetings to introduce Obama to her supporters in the fall of 1995, including the gathering at Ayers' house. It was not a fundraiser, as some reports have stated. And it was not the meeting that launched Obama's political career, as other Obama critics have alleged.

Other prominent Hyde Park neighbors don't remember Obama and Ayers as being particularly close, though Obama's chief strategist, David Axelrod, did say in February that Obama and Ayers were "certainly friendly."

Ayers' Reputation

So, is Ayers such a bad person to be friendly with? Is he still an unapologetic terrorist?

In his memoir, Fugitive Days, Ayers doesn't directly say which Weather Underground bombings he may have had a role in planning or executing, coyly writing, "some details cannot be told."

But in a New York Times article on the book, Ayers is quoted as saying, "I don't regret setting bombs. I feel we didn't do enough." Coincidently, that article was published on Sept. 11, 2001. Days later, Ayers complained on his Web site that the quote was taken out of context, saying, "My memoir is from start to finish a condemnation of terrorism, of the indiscriminate murder of human beings, whether driven by fanaticism or official policy."

Regardless of his background, it was never a problem for anyone — including Republicans and Chicago's most powerful business leaders — to work with Ayers on Chicago's public schools. In fact, Ayers is widely respected in the field of urban education.

"It was never a concern by any of us in the Chicago school reform movement that he had led a fugitive life years earlier," said former Illinois state Republican Rep. Diana Nelson, who worked with both Obama and Ayers over the years. "It's ridiculous. There is no reason at all to smear Barack Obama with this association. It's nonsensical, and it just makes me crazy. It's so silly."

Nelson says her fellow Republicans "might snort when they hear the name Bill Ayers, because they know he comes from a wealthy family, they know he became a radical activist early in his life ... but beyond just snorting, I don't think anyone gives it another thought."

"I don't remember ever hearing anyone raise concerns or questions or concerns about [Ayers'] background," says Anne Hallett, who has worked closely with Ayers on the Annenberg Challenge grant and with Obama on education and other community and legislative matters. "And that included everybody I was engaged with," including prominent Republicans, and corporate and civic leaders in Chicago, Hallett adds.

Hallett calls this attack on Obama's association with Ayers and the Annenberg Challenge by further association, "a smear campaign. It's a political diatribe that has no basis in fact. The Chicago Annenberg Challenge was an extremely positive initiative. It was well-vetted, thorough, and the fact that it is now is being used for political purposes is, in my opinion, outrageous."